Arf, the Swiss-regulated global settlement banking platform, with support from the Stellar Development Foundation, is now offering what it claims is “the world’s first unsecured, short-term, USDC-based working capital financing solutions for licensed financial institutions.”
Making cross-border payments faster, cheaper, and more transparent and inclusive is “a priority for global economic development and prosperity.”
However, as a capital-intensive sector, cross-border payments “remain a challenging industry for payment and remittance companies with limited capital; but solutions that bridge Web3 and traditional finance can tackle this problem.”
Arf, a global settlement banking platform, and the Stellar Development Foundation, a non-profit organization supporting the growth and development of the open-source Stellar network, have teamed up “to solve the liquidity constraints faced by payment and remittance companies in cross-border payments.”
Arf’s solution, “known as the Arf Credit Line, is built on the Stellar network and powered by Circle’s USDC, and provides access to unsecured and short-term (1 to 5 days) working capital for qualified licensed financial institutions worldwide.”
With Arf Credit Line, financial institutions can “make same-day settlements with their partners in desired countries without requiring pre-funding or any additional collateral.”
Arf Credit Line “eliminates the capital-intensive business model for sending parties and counterparty risk for receiving parties in cross-border payments.”
Moreover, because all of these transactions happen on-chain with USDC, money transfers “can be transparently tracked without any intermediary.”
Arf Co-founder & CEO Ali Erhat Nalbant said:
“Today, there are more than $4 trillion in pre-funded accounts that could be used for global payments’ growth and development instead of staying idle. Arf Credit Line unlocks this trapped capital to drive trillions of dollars worth of industry growth. We currently help more than 800 money transfer locations worldwide to make same-day treasury settlements with their partners in a fully compliant manner, so that they can grow and thrive in competition with global players.”
Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation, said:
“We are supporting Arf in creating real-world blockchain use cases that transparently solve liquidity constraints for cross-border payments. Our commitment to making financial services more accessible for everyone is reinforced by category-defining solutions like Arf’s Credit Line.”
Within four months after its launch, Arf Credit Line has “provided over $80 million in loans to licensed financial institutions, generating a cumulative on-chain USDC volume of $150 million.”
Arf Credit Line claims it “creates an exceptional use case showing how USDC on Stellar can be utilized for working capital lending, along with making settlements more transparent, accessible, and in real time.”